How Nathan Barry built ConvertKit for $ 2.1 million a month and bought a ghost town

In this podcast episode on Niche Pursuits, we discover the key themes that made ConvertKit a success. ConvertKit is an email marketing platform started in 2012 by Nathan Barry, a former designer and writer.

I checked the tool back in 2018 and you can read about my personal experience with ConvertKit here.

The software now generates monthly sales of $ 2.1 million, has been listed multiple times in the INC 5000 and founder Nathan Barry recently invested in a real ghost town.

Here are the exact numbers if you were curious:

And you can always check the publicly listed numbers on Baremetrics here.

Check out the entire interview with Nathan Barry

How consistency leads to success

How does a former writer build a high-growth software company?

Appear every day for two years.

Sean McCabe gave this quote to Nathan, who stayed with him throughout Convertkit’s construction.

Nathan explains that it is 2 years Part of the quote that made the difference to him.

He would see so many people starting projects or companies that they would never really make it through.

As you make an effort to see projects over the long term (at least two years), you will find that your results will have a positive impact.

Nathan is from Boise, Idaho, a relatively unknown hotspot to the old school internet marketing community. Sites like Bodybuilder.com, Click Funnels, and ClickBank are all located in Boise.

Bryan Deluca from BodyBuilding.com was part of the inspiration. Bryan was never distracted from the next new thing. He continued to focus on building BodyBuilding.com. He foregone short-term profits to focus on long-term building.

Before Nathan started ConverKit as a writer himself, he stuck to this approach to consistency and focus.

As a writer, he committed himself to producing 1,000 words a day. Nathan finished the book; Once completed, it had an 80-day writing phase.

There was no way he wanted to stop this series, so he kept writing. At some point he had one 600 day series.

His goal for his book was to sell $ 10,000 over the life of the book. It ended up doing $ 12,000 in the first 24 hours. $ 19,000 by the end of the first week.

The second book. $ 26,000 on the first day and $ 50,000 at the end of the first month.

How did he generate the sales?

Nathan discovered the power of email marketing.

The encouraging part is that Nathan only had an email list of 800 people at the time.

With his newfound obsession with email marketing, Nathan built Convertkit.

Grow and monetize your email list with ConvertKit

  • Grow your audience by turning random visitors into subscribers
  • Build meaningful relationships with your followers
  • Earn money with paid products or newsletters
  • Easy to create landing pages and forms

Try ConvertKit FREE for 1 month

How the Convert Kit began: The Web App Challenge

The project started as a web app challenge Nathan created to publicly document his new project. The requirements of the challenge:

  1. Build a web application with recurring revenue of $ 5,000 in six months.
  2. He was only able to spend $ 5,000 of his own money during the entire process. This means that all other development costs would have to be borne by paying customers.
  3. He couldn’t spend more than 20 hours a week on the project at first. He had other contracts that he also had to focus on.
  4. Make the project public so everyone can see the progress. (This is still a focus at ConvertKit today.)

Unfortunately, Nathan didn’t achieve his goal.

We’re going to give him a break as the goal was a bit ambitious.

But he stuck to his plan and stuck to it.

Building Convert Kit in Public

I know firsthand how to build in public because the beginning of Niche Pursuits was all about my case studies and sharing results (both good and bad).

Telling the world what you are working on is not easy. Nathan credits this as one thing that moved Convertkit in the right direction.

Public building not only held him accountable, it also generated help from the community.

People came from the woodworks to offer help. Teton Shaw, who previously started a number of successful SaaS companies, and David Hauser, who was running grasshoppers at the time, all offered their help.

Nathan would blog about his experience and people would jump in on the comments and offer advice right away.

The first versions

It wasn’t always easy for Nathan. At the end of the six months, he had recurring monthly income of $ 2,000. An outstanding achievement, but still not met its $ 5,000 goal.

The first versions of ConvertKit were pretty bare. It was essentially an email collection tool with automated email sequences.

With ConvertKit, you couldn’t even send an email to all subscribers at the same time.

ConvertKit’s greatest challenges

Win customers. At first, Nathan tried to get customers through content marketing. Content marketing at the early stages of a software company is difficult. It’s even more difficult when the software is early and needs improvement.

Nathan was able to solve this by talking to customers. Nathan found that many were not interested in switching from their current Mailchimp or Infusionsoft.

To solve the problem, Nathan followed Paul Grahams’ advice and did things that don’t scale the blog article he teaches in YCombinator.

Nathan has decided to migrate users from their existing platforms to ConvertKit for free.

The migration process sometimes took up to 8 hours. At the time, he was charging $ 50 a month.

If you do the math Nathan made far less than the local fast food worker.

The compounding effect

When Nathan looked at this time as an investment, he saw growth. Every migration would become more convenient, the sales calls would be better and the processes would be more efficient.

Convertkit statisticsIn November 2020, 2329 new customers were acquired. It’s impossible that their team spent 8 hours today migrating all customers, but it was through things that weren’t scalable that allowed ConvertKit to see what was important to customers.

At this point, ConvertKit started.

You have seen compounding effects everywhere. Relationships, fitness, learning, investing, and you’ll see a SaaS business build. Most people don’t go on long enough to see the connection return.

It takes years. Think of it as an investment. In the first few years of investing, you won’t see much compound interest. But after about ten years the compound interest becomes significant.

As the ConvertKit team grew, they stayed focused and consistent. Just like Nathan originally set goals and challenges, ConvertKit continued to set goals and even showed all of their metrics publicly on Baremetrics.

Growing ConvertKit

In 2018, ConvertKit landed for the first time with 72 on the Inc 5000. In 2019 they took 29th place on the Inc 5000.

ConvertKit has also acquired customers from some of the biggest names and brands in the world. Today they have a total of 33,878 active customers.

Convertkit number of customers

I’ve sent a total of 14 million emails through ConvertKit alone.

Nathan admits he has some catching up to do with MailChimp, which has sales in the range of $ 700 million. But they also had a clear lead.

Nathan believes that by staying consistent and focused, he can outperform and beat Mailchimp, the current leader in the email marketing industry.

Monetize your ConvertKit emails

Recently ConvertKit released its product monetization feature. A tool that allows you to monetize your email campaigns with paid products or a paid newsletter.

Competitors like Substack have entered the market and are gaining a significant share of the paid newsletter market.

The Substack email platform is still small compared to ConvertKit. By comparison, some of the best Substack users have 10,000 subscribers. The best ConvertKit subscribers are well under 100,000, if not millions, of subscribers.

Substack Vs ConvertKit

Yes, you can now create a paid newsletter on ConvertKit. Nathan sees the difference between Substack and ConvertKit in that Amazon is Shopify.

Substack has created an e-mail platform similar to Amazon with end-to-end solutions that can only be customized to a limited extent. You can’t even change the substack branding.

ConvertKit, on the other hand, is more based on a Shopify mentality. An easy to use platform but one that can be customized as you wish.

Other email marketing platforms stacked against ConvertKit

How has life changed for Nathan Barry?

In retrospect, the $ 5,000 limit he set himself when starting a business seems to be small. Nathan admitted today, “$ 10,000-20,000 is kind of a rounding error in a budget now.”

He continues to focus on building ConvertKit and his writing remains consistent. The goal of writing every day remains. Although he no longer has the 1000 word requirement.

While he’s focused on building a great company, that doesn’t mean he can’t have a bit of fun.

Buy a ghost town

Nathan Barry ghost town

In addition to Brent Underwood and Ryan Holiday, who runs the Daily Stoic website, a popular email newsletter on ConvertKit, ”Nathan invested in a literal ghost town.

Cerro Gordo has since been featured in nearly every major news and travel blog. It is now a popular destination with an incredible history.

Nathan says that while it was ultimately an investment, it just sounded like fun owning a ghost town.

You can read about his ghost town here.

Try ConvertKit

I have been using Convert Kit for niche pursuit, Link Whisper, and other businesses for a number of years. I was very happy with the product and the support team is excellent.

If you want to try ConvertKit for free, you can manage up to 1,000 subscribers here for free.

If you want to start a paid newsletter, you can start now with ConvertKit. They recently announced their “Commerce” package that allows you to sell digital products directly through ConvertKit. This also includes paid newsletters. You can try ConvertKit Commerce here.

If you already have an email list of 1,000+ emails and want to try ConvertKit, you can get a 14-day free trial here.

Overall, I hope you enjoyed the Nathan Barry and ConvertKit success story!

Grow and monetize your email list with ConvertKit

  • Grow your audience by turning random visitors into subscribers
  • Build meaningful relationships with your followers
  • Earn money with paid products or newsletters
  • Easy to create landing pages and forms

Try ConvertKit FREE for 1 month

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